The formula to calculate the PEG Ratio is:
\[ \text{PEG} = \frac{\text{P:E}}{\text{EPSG}} \]
Where:
The PEG ratio is a financial term that describes the ratio of the price-earnings ratio and the rate of growth of the earnings per share. The lower the ratio, the higher the earnings per share growth rate, indicating potentially better investment opportunities.
Let's consider an example:
Using the formula to calculate the PEG Ratio:
\[ \text{PEG} = \frac{20}{10} = 2 \]
This means that the PEG ratio for this scenario is 2.